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Champion Sports Company manufactures and distributes sports memorabilia mostly to retailers. With intense competion from surrounding distributors, Champion Sports pays sales people commission on each sale. Below is a breakdown of fixed and variable costs. Per Unit Sales $110 Variable Expenses Production Commission $50 $7 $57 Fixed Costs Rent Advertising Salaries Other Total Fixed Costs $15,000 $40,000 $160,000 $85,000 $300,000 Required: a. Calculate break even point in dollars and sales for Champion Sports. b. If 35,000 pieces of memorbilia are sold this year, what will the net operating income for Champion Sports Company be? c. If commission is increased by $1.25 per unit sold and the result is 10% increase in unit sales, what will the new net operating income be? d. Refer to the original data. If a $30,000 increase in advertising costs yields a 6% increase in unit sales, what will the new net operating income be? e. Refer to #d. What is the new break even point in units and sales? f. Of all the alternatives given, which is the best based on quantitative data only? Break Even Point Units Sales Sales Variable Expenses Contribution Margin Fixed Expenses Net Operating Income Sales Variable Expenses Contribution Margin Fixed Expenses Net Operating Income Sales Variable Expenses Contribution Margin Fixed Expenses Net Operating Income Units Sales

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